China HSBC Flash PMI Recovers But Still In Contraction; Weak Aussie PPI Points To Rate Cut; Dutch Government CollapsesEconomic Data
(CN) CHINA APR HSBC FLASH MANUFACTURING PMI: 49.1 V 48.3 PRIOR (6th month of contraction)
(AU) AUSTRALIA Q1 PRODUCER PRICE INDEX (PPI) Q/Q: -0.3% V +0.5%E (first decline since Q4 of 2009); Y/Y: 1.4% V 2.2%E (lowest since Q2 of 2010)
(SG) SINGAPORE MAR CPI M/M: 0.8% V 0.3%E; Y/Y: 5.2% V 4.7%E
(JP) JAPAN MAR NATIONWIDE SUPERMARKET SALES Y/Y: -2.4% V +0.3% PRIOR
(JP) JAPAN FEB FINAL LEADING INDEX: 96.3 V 96.6 PRELIM; COINCIDENT INDEX: 95.0 V 93.7 PRELIM
(HU) HUNGARY APR ECONOMIC SENTIMENT: -19.3 V -19.0 PRIOR; BUSINESS CONFIDENCE: -9.0 V -8.1 PRIOR; CONSUMER CONFIDENCE: -48.8 V -49.9 PRIOR
Markets Snapshot (as of 04:30GMT)
Nikkei225 -0.1%
S&P/ASX -0.2%
Kospi -1.2%
Taiwan Taiex -0.4%
Singapore Straits Times -0.2%
Shanghai Composite -0.2%
Hang Seng -0.6%
Jun S&P Futures 00.2% at 1,372
June gold flat at $1,643/oz
June Crude -0.1% at $103.75
Overview/Top Headlines
Regional markets are softer across the board despite the modest Friday gains on Wall Street, as sluggish economic data from Asia-Pacific added to more European turmoil over the weekend. China flash HSBC manufacturing PMI came in at 49.1, above prior month's 4-month low 48.3 but still below the 50 contraction threshold for the 6th consecutive month. Last week's analyst chatter suggested there was an outside chance April HSBC data would return to expansion after surprisingly strong official government figures in March.
In Australia, Q1 PPI contracted on sequential basis for the first time since late 2009. Coming ahead of tomorrow's more telling quarterly CPI, producer price data seems to have nudged the opening to RBA resuming its policy easing campaign as early as next month much wider. AUD fell over 30 pips across the board following the PPI release, while copper lost 1% for the session, hitting its low point right after the HSBC PMI.
The Dutch government collapsed under the weight of contentious austerity debate, as far-right politician Wilders and Freedom Party walked out of parliament in opposition to the impact of budget reduction on nation's pensioners, effectively ending their alliance with the government.
PM Rutte noted snap elections are the most logical next step, prompting Finance Minister de Jager to cut his IMF mission short to prepare for an emergency Monday cabinet meeting.
French President Sarkozy trailed front-runner socialist candidate Hollande in the first round of national elections. As the two candidates head for a run-off on May 6th, far-right 3rd place finisher Le Pen will figure more prominently after a surprisingly strong showing with 20% of the primary votes. Sarkozy will now attempt to court some of the anti-immigration fringe supporters of the Front National while engaging Hollande in more extensive dialogue. Hollande, opposed to holding more than one head-to-head debate, is still seen as the most likely winner by a margin of 54-46%, as indicated in post-primary polls.
Speakers/Geopolitical/In The Press
(CN) China state researcher Ba Shusong: Forecasts China GDP to hit bottom in Q2 or Q3.
(CN) China Premier Wen: Global debt and financial crisis is not over; Risks to global economy still remain.
(JP) BOJ Gov Shirakawa: Attributes prolonged deflation in Japan to absence of concrete fiscal reform plan. - Nikkei News
(JP) Japan PM Noda cabinet approval rating in March fell from 34% to 29%. - Nikkei News survey
IMF's Lagarde: US and Japan need to reduce entitlement spending.
(KR) South Korea Ministry of Knowledge Economy (MKE): May lower 2012 trade surplus due to slowing China exports. - Korean Press
(EU) ECB's Coene: Current monetary policy stance is appropriate and very accommodative; Slightly higher eurozone CPI is not problematic.
Equities
AMLN: Retained advisors and contacted prospective bidders last week regarding potential sale of the company.
WMT: Investigating bribery allegations at Mexico unit Wal-Mart de Mexico in response to NYT report.
C: Said to have submitted possibility of $8B in share buybacks (about 8% in market cap) over 2 years as part of Fed stress tests and request to return cash to shareholders. - Financial Press